Lloyd's Maritime and Commercial Law Quarterly
EEC COMPETITION RULES AND MARITIME TRANSPORT
Dieter Rabe and Michael Schütte*
A. History of the regulation
This paper considers Council Regulation (EEC) No. 4056/86,1 the first Regulation of the Council of the European Communities on the application to maritime transport of the competition rules of the EEC (contained in Arts. 85 and 86 of the Treaty of Rome). First, its historical background may be briefly reviewed.
Ever since the first agreements between scheduled ocean transport carriers on freight rates and allocation of cargo and callings (liner conferences or liner rings), there have been different regulatory policies vis-à-vis the international ocean shipping industry: laissez-faire, supervision of anticompetitive practices, and protectionism.
Laissez-faire is exemplified by the British policy of tolerating cartelization in the belief that monopoly, however condemnable, is transient unless supported by the coercive power of government. The British policy is evidenced in the 1909 Royal Commission Report on Shipping Rings2 advocating, though not unanimously, legislative inaction in that field. But probably its best known expression is the famous Mogul Steamship case.3 An association of competing shipping lines had combined to exclude a rival from the Chinese trades by employing loyalty (deferred) rebates, cut-price competition, and threats to dismiss from their service agents who arranged to load the rival’s ships. The association was held not to be liable at common law for damages for business harms done to the rival.
In the United States, the U.S. Shipping Act of 1916 took the approach of tolerating certain restrictive practices if they were not discriminatory and exclusionary. This approach was retained in the 1984 Act.4 The 1984 Act outlaws closed confer-
* Dr Rabe and Dr Schütte are partners in Schön & Pflüger, Hamburg. Dr Schütte is the resident partner in the firm’s Brussels office.
1. Council Regulation (EEC) No. 4056/86 of 22 December 1986 laying down detailed rules for the application of Arts. 85 and 86 of the Treaty to maritime transport: [1986] O.J. No. L 378/4. The regulation is printed as an appendix to this article, infra, p. 197.
2. Cmnd. Nos. 4668–70. This report remains a very useful document today.
3. Mogul S.S. Co. v. McGregor, Gow & Co. (1889) 23 Q.B.D. 598, affmd. [1892] A.C. 25. Cf. Richard A. Epstein “Intentional Harms” (1975) 4 J. Leg. Stud. 391, 423–41 (supporting the judgment on common law grounds).
4. The 1916 Act is codified in 46 U.S.C.A., ss. 801 et seq. See, on the 1916 Act, House Commission on Merchant Marine and Fisheries, Report on Steamship Agreements and Affiliations in the American Foreign and Domestic Trade, H.R. Doc. 805, 63d Congress, 2d Sess., 51 (1914) (Alexander Report). The 1984 Act is codified in 46 U.S.C.A., ss. 1701 et seq. (Pocket Suppl., 1987). For an exposition of U.S. law and policy, and their evolution over time, see F. Conger Fawcett and David C. Nolan, “United States Ocean Shipping: The History, Development and Decline of the Conference Antitrust Exemption” (1979) 1 Nw. J. Int. L. & Bus. 537; George Garrey, “Regulatory Reform in the Ocean Shipping Industry: An Extraordinary U.S. Commitment to Cartels” (1984) 18 Geo. Wash. J. Int. L. & Econ. 1; Charles Buderi, “U.S. Policy on Regulation of Liner Shipping in the 1980s: A View from Washington” (1986) 17 J.M.L.C. 493, (1987) 18 J.M.L.C. 119.
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